Shares of Arista Networks(NYSE: ANET), a computer networking company, rose today after an analyst increased her price target for the stock.
Arista has emerged as a leader in the artificial intelligence (AI) networking market, which has sparked a lot of interest among investors recently.
Arista's stock was up 4.9% as of 1:31 p.m. ET.
A networking leader capitalizing on AI
Morgan Stanley analyst Meta Marshall increased Arista's price target yesterday from a previous price of $300 to $325 and reiterated an "overweight" rating. Investors view price target increases as a positive sign for a company's stock and pushed Arista's share price higher as a result.
The recent price target increase comes as Arista's stock has received green lights across the board from analysts giving its shares a solid buy rating.
But investors have already been bullish on Arista this year. The company is a leader in the computing networking space and has emerged as a competent AI networking device and service provider. Both Microsoft and Meta use Arista's networking solutions; they accounted for 39% of Arista's sales in fiscal 2023.
Arista Networks has long been entrenched in the data center networking space, which has made it a natural fit for many AI-focused companies. Investors have taken notice of Arista's position and have pushed its share price up 91% over the past year.
Potential at a price
Arista's stock currently trades at price-to-earnings ratio of about 40, making the tech stock a pricey investment right now. But that doesn't mean it still doesn't have lots of potential.
With more than two decades in the tech space and a well-earned position in the networking market, Arista won't be unseated easily. This makes the company an interesting opportunity for investors seeking an AI play that's off the well-worn path of Meta, Microsoft, Apple, and other large tech companies.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Chris Neiger has positions in Apple. The Motley Fool has positions in and recommends Apple, Arista Networks, Meta Platforms, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
